Transcript of the above video: 

As the title of this video suggests, we are talking about tariffs associated with movies. For those of you who are avid followers of this channel, you have probably surmised at this point I am a bit of a movie buff. I love movies; I love doing little quotes from movies and trying to relate it back to the stuff we talk about on this channel. For those who are aware of the films of Mr. Kevin Smith, you may recognize the thumbnail; it's taken from Clerks 3. 

At the end of the day, tariffs are taxes. Now who exactly pays them kind of depends on the underlying facts in a given case. But tariffs at the end of the day are taxes and they do tend to end up being paid by the end consumer. And it looks like Mr. Trump has yet again come up with some new tariff idea, which I have my own kind of qualms with how Mr. Trump is just going about saying, "we can tariff this, we can tariff that." At the end of the day I didn't know that it was the President's unilateral imperial prerogative to be able to just tariff things at a whim. Now that said, he can't and things do have to go through something akin to due process, but he goes around and says all these things and frankly I think it's starting to cause some damage. I mean especially looking at the situation involving India recently where his seemingly off the cuff desire to go ahead and slap them with a tariff, may have led to some really negative consequences in terms of the deteriorating nature of our relationship with the Indians which I don't think there was any reason it had to go that way. Hopefully things can get turned around and can get kind of patched up diplomatically, but again this whole running around bandying about tariffs as if they are sort of nothing, it's concerning. And again, Congress has to impose taxes. It's not unilaterally the President's prerogative to just say, "oh we are taxing this, we are taxing that!" Well Congress has the power to tax not the Executive. 

That being said, I thought of making this video after reading a recent article from the Bangkok Post, bangkokpost.com, the article is titled: The US to impose 100% tariff on movies made outside the country. So in the title we are specifically talking about Thailand, and I am talking about that because Thailand is the recipient of a lot of film recording; it is the backdrop for many people to make movies. The film industry is rather robust in Thailand and folks decide to make movies here all the time. One, let's take Mr. Trump's statements here with something of a grain of salt. It is not a foregone conclusion he's going to get 100% tariff on movies made abroad. I don't know what he's trying to do here. Is this more art of the deal kind of stuff where he comes in and makes some bold statement that nobody really wants - 100% tariffs - and then it sort of gets walked back in negotiations if you will. The immediate thing I thought of when I saw this headline was how do you tariff a movie? I mean - that said let me get into this. Quoting directly: "The United States will impose a 100% tariff on all movies made outside the country." What does that mean, "made outside the country"? If one scene is filmed abroad; I mean watch some of these films. It's like, I think I was watching one of the Mission Impossibles recently and it got to the credits, and the movie occurs in like four different major cities across like three different major continents, and there's a unit team for this country, a unit team for that country, a unit team for this other country. Marvel movies are the same way. You will see unit team this country or city that's inside and outside the United States. How are you going to put 100% tariff on that? And how are you going to determine if it is “made” outside of the United States? Again on top of it, is nobody else concerned about this imperious, "I'm just tariffing it; I'm the Emperor of America and I can dictate what tariffs occur." What is this? It's ridiculous. Quoting further: "US President Donald Trump said in a post on Truth Social on Monday, "Our movie making business has been stolen from the United States of America by other Countries, just like stealing 'candy from a baby'," he said on Monday." Well why don't you listen to Adam Carolla a little bit where he talks about the reason that the movie industry has basically fled from California, is their insane tax regime and all of their regulations associated with making movies in that jurisdiction which was once the cradle of the American entertainment industry, and it has largely just sort of eviscerated; it has gone. And what is the reason for that? Well too much government interference. So the answer is more government? Let's tax them now. 

Now I want to be clear on something, and I have a tremendous amount of respect for Mr. Trump on one major thing that he did in his first term which was the revocation and repeal - instantly by the way - he did this within the first hours of his Presidency. Frankly I tend to be impressed by the things that have happened at the beginning of Trump's terms. For example, this time as well, where he came in and reversed tons of things, for example OECD; just threw that out. The memo on that was spot on. It does attack National Sovereignty. It's a problem or was a problem for America. We are still dealing with it over here in Thailand, hopefully not for much longer. But in his first term, he came in and he killed TPP, the Trans-Pacific Partnership. And the irony of that action was that he became hated by Hollywood, when in fact killing TPP probably saved Hollywood's hide. Why? Because the way that that was going to be set up, it would have created this supranational sort of Court System, they were called Commissions, whereby essentially intellectual property theft could be dealt with in these supranational courts and they could impose a judgment against countries and say, "Oh Avengers Endgame was stolen from the animators in Vietnam" who were substantially cheaper than the animators in the United States, but it was stolen from there and it was put out on the black market and now you can get Avengers Endgame, nobody has to pay the movie ticket price. It causes the movie sales to go down, the Box Office grosses to go down. Under TPP, the filmmaker, the corporation, would then be allowed to sue the nation of Vietnam and get a judgment against Vietnam which can then be sold off to some financial institution where they will collect the money over time as it is a government debt. But the long story short, that would then create the incentive for all of, for example the CGI, Computer Generated Graphics Industry, to move abroad. It would have killed Hollywood in many, many ways and Trump's rescission of it or rejection of it within hours of becoming President back in his first term, resulted in my opinion, directly in saving those jobs. And then the irony was Hollywood hated him throughout his term and then his off term during the Biden Administration and then coming back again, Hollywood still hates him even though I would argue, destroying TPP was the best thing he could have ever done for them. 

Now that said, these tariffs, Trump has just become sort of tariff happy; I don't know why. I think history has been the judge of how tariffs ultimately end up working out. And when you put that together with what is called the Triffin Dilemma, or Triffin's Dilemma, it's not in my opinion a recipe for good economics. That said, quoting further: "Trump had threatened to impose such levies earlier in May but offered few details, leading to confusion among entertainment industry executives." I urge those who are watching this video, go check out that article in Bangkok Post, bangkokpost.com, for further insight. 

That being said, going back to this. Look, I just think this really flippant attitude toward tariffs is not doing the country a lot of good. And meanwhile, how is this supposed to benefit the film industry? I just don't see it. Look, they have to make their money too and they do that by setting their own budgets and by going to places that - look, some films call for different backgrounds. They need to make a movie, if it's a movie about Vietnam, the Vietnam War for example, they need to make it in Southeast Asia for there to be any realism. I just don't see, you are going to try to capture that in the Everglades in Florida or something? I just don't see that. How do you do that? And then we are going to tariff it 100%. And again what does 'made outside the country' mean? If there is one scene, or one sequence: in a two-and-a-half-hour movie there is one sequence that is 7 minutes long that occurs in a foreign country, the whole movie is going to be tariffed? How do you even do that? That's again why I used the thumbnail. I really like Clerks 3 where it gave kind of a fictional insight into what it was like for Kevin Smith to start himself out in the Movie Business; it's a collaborative effort. A movie is not like a product, like a car or something where you put in components and then out comes this physical thing where you can measure how much of it was made where. Movies just aren't like that to my mind. So again, I'm not sure that this is great policy. In fact I am certain it's not good policy. I think tariffs overall, taxes, Trump has sort of always touted himself as being anti-tax, low tax, pro-business. These aren't pro-business moves; these aren't low tax moves. If anything, these are just adding red tape, more interpretation to have to go through to decide how to tax these things. Again, it doesn't look like it's conducive to movie making, to efficient movie making and then how do you, if it comes out on Netflix, what? You are going to hit Netflix over the head for money for some movie that was made in Spain or something? I mean the whole thing sounds ridiculous. Again it sounds like this usual art of the deal kind of stuff that he seems to like, but at the end of the day we are talking about the Presidency of the United States; we are talking about the US Government; we are talking about people's jobs and livelihoods, and we are also talking about his Constitutional parameters, which again I don't see anywhere in the enumerated powers or in Article 2 of The Constitution that says the President can just willy-nilly declare tariffs on movies, or whatever he wants. I mean saying that there is going to be tariffs on movies is as arbitrary as saying there is going to be taxes on paper. I mean, it just doesn't make any sense to me, especially in line when you understand the Constitutional parameters of the Presidency, I just don't see how this all works out in any legal way, in any practical way. That being said, we will certainly be keeping you updated on this channel as the situation evolves.